State Education Funding sees major overhaul in finances

Monday

Sep 30, 2013 at 7:00 AM

Education bill includes all-day kindergarten funding beginning in the fall of 2014

Doug DeDecker Staff Writer

Students across the state have started to return to a new school year. Many times a new school year comes with a mix of anxiety, but this year, thanks to a windfall of government spending, most school boards state-wide, at least, are breathing a sigh of relief.

Gov. Mark Dayton signed the education budget bill in May, boosting funding for public schools throughout the next two years. The biggest impact of the $485 million influx comes in the form of a full-day kindergarten push, making all day, every day kindergarten a possibility for every school in the state.

The $15.7 billion bill is the biggest slice of the state budget. It increases education spending by $485 million over current levels. The Democratic-Farmer Labor Party controlled Legislature's latest biennium budget also includes new money for early childhood education scholarships, special education programs and a 1.5 percent increase in the basic per-pupil formula each of the next two years.

All-day instruction Minnesota Sen. Chuck Wiger, who chaired the education finance division and authored the E12 senate bill, said significant investment in education hasn’t happened for almost an entire generation.

“I’m very pleased with the E12 funding bill,” Wiger said. “It is a strong investment in education and provides opportunities for students throughout Minnesota, regardless of their zip code. Now that these changes are being implemented we hope it is going to result in raising the education achievement in our state.”

Every school district in Minnesota will get state funding for all-day kindergarten under the education finance bill. Top lawmakers said their focus on early learning was the key to improving a growing achievement gap and education as a whole.

Requirements for the state-funded, all-day kindergarten option, under the new law, is that the program has to be free, has to include at least 850 hours of instruction during the school year and has to be available to all families who wish to enroll their children.

Democrats have stressed individual districts can choose not to offer all day kindergarten. Those that opt out won’t get the state funds dedicated to that programming.

Keeping up the pace

As part of the two-year education-funding bill, school districts will receive 1.5 percent increases each year to the state's per pupil funding formula.

The annual 1.5 percent increase is comparable to a cost of living increase, Melcher said. For the first year there will be 1.5 percent more money for each student enrolled in the district. The second year there will be an additional 1.5 percent increase.

“There are some districts who have been making budget cuts because they have increases in their expenses from year to year,” said Tom Melcher, the School Finance Director at the Minnesota Department of Education. “What this would do is provide that extra 1.5 percent of revenue per year that would hopefully prevent some districts from needing to make additional budget cuts. It’s keeping up with inflation.”

The bill will also pay back $874 million owed to schools from previous budget deals. That pay back relies on a temporary income tax surcharge on top earners.

Minnesota's tax revenues for the budget year that ended June 30 came in $463 million ahead of forecast. Seventy percent of the extra revenue came from higher-than-expected individual income tax payments, according to a quarterly review issues in July by the Minnesota Management and Budget.

Some of that money was attributed to stronger-than-expected economic growth, but department officials believe much of it came from wealthy taxpayers shifting income from future years into 2012 to beat anticipated hikes in income and capital gains taxes, yielding a one-time gain.

Like for like levies

While paying back the schools the money they were owed will help, Senator

Wiger added that a key issue that was tackled in the legislative session was the issue of school levy inequities. Legislators made strides to help districts at the bottom end of the referendum game.

Legislation was passed to get districts that are operating without a levy referendum the ability to increase revenue to $300 per pupil. This is accomplished through school board levy authority. Similar to local city, county and state governments setting their levy amounts without voter approval, legislators have given school boards in districts without a voter-passed referendum, the discretionary authority to raise additional revenues up to $300 per student.

“There are about 10 percent of school districts in the state who are unable to pass a voter-approved operating referendum,” Melcher noted. “For those districts, this law allows school boards to pass a resolution that would allow them to raise $300 per pupil of revenue as if they had gone to the voters and passed a $300 per pupil referendum”

Wiger said that there were a number of provisions in the tax bill, but the $300 per pupil unit was with rural districts in mind.

“Everyone should have the same right of access to educational opportunities throughout the state regardless of zip code,” Wiger said. “It just wasn’t fair that some of the districts were coming up short, particularly in rural Minnesota.”

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